Institutions embrace crypto staking even as rewards keep falling
Crypto investors are locking up more tokens to help secure blockchains, even though the rewards for doing so are shrinking. Staking means committing tokens to help validate transactions and keep a blockchain running, in exchange for rewards. Data from Bitwise shows both Ethereum and Solana drew more staked tokens in the third quarter, while yearly yields fell on both networks.
Key numbers from the staking report
- Ethereum now has more stake securing it than at any point in its history: 43.8 million ETH staked, or 35.9% of the total supply, according to Kam Benbrik, head of onchain research at Bitwise.
- Solana's active stake climbed to 440.5 million SOL, per Bitwise's Q4 staking report.
- Despite the growth, gross annualized staking yields fell on both networks.
The split between rising participation and falling returns raises questions about what actually drives investors to stake, how much they earn, and whether growing blockchain activity can offset declining rewards from token issuance.
Why demand rises when markets fall
John Zettler, senior director of product at Payward Services, the business-to-business arm of Kraken parent Payward, said staking tends to move against the market cycle.
"Generally, we observe that staking is countercyclical," Zettler said. "In weaker market conditions, buy-and-hold behavior increases, driving greater staking demand and putting downward pressure on yields."
He said bull markets can reverse those forces: higher transaction fees can increase rewards, while investors' preference for keeping assets liquid can reduce staking participation and lift yields.
Easier access pulls in new stakers
Industry executives point to a more lasting shift: staking is becoming a normal part of holding crypto. A Coinbase spokesperson said staking exchange-traded funds (ETFs — funds that trade on stock exchanges and track an asset) and digital asset treasuries are broadening access.
"Rather than seeing balances shift based on short-term movement, retail and institutional investors are buying into the long-term benefits of staking their crypto assets as more opportunities arise," the spokesperson said.
Zettler said clients typically stake assets they already own, with asset selection and custody decisions generally coming before the search for rewards. He added that Ethereum staking's long operating history has helped build acceptance among institutions.
What is confirmed
The staking totals and the yield decline come from Bitwise's staking report and its onchain research head. The views on countercyclical demand, custody-first behavior, and broadening access are statements from Payward and Coinbase representatives, reported by CoinDesk — they are industry claims, not independently verified data.
What is still unclear
The exact size of the yield decline is not given in the available material. The full article also points to falling rewards and withdrawal delays testing staking economics, but the detailed figures behind that test were not included in the supplied text.
Why it matters
Staking has become a major income stream for crypto holders and a growing product line for exchanges and fund providers. More staked tokens means more of the supply is locked away from trading, while falling yields mean the payoff for locking them up is getting smaller — a combination that will shape how sustainable the staking business is for the institutions now entering it.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.